This is how Technology Changes the World of Finance in Indonesia

Technology has changed many aspects of our life today. How does it change the finance world in Indonesia? Find the answer here.

Technological developments have had an impact on the economic patterns that have developed in the community today. Economic actors, especially entrepreneurs, must be able to keep up with the changing times to survive amid the situation.

This is how technology change the world of finance in Indonesia

According to Sri Mulyani—Indonesia’s finance minister, the business sector in services is currently growing quite high compared to the other business sectors. This, she said, was triggered by the existence of millennial generations who had the purchasing power that affected consumption patterns in the community.

Sri Mulyani pointed out the presence of various business opportunities in the field of online motorcycle taxi services and online shops. Those efforts are the evidence of how technology change the world of finance in today’s society. Business people work hand in hand to provide services that can meet the needs of the community.

Not only that, but the perception of success has now also changed. People used to be declared successful when they owned a house and a car. Nowadays, the concept of mobility is extraordinary. It is not necessary to own, because now we can share.

In fact, these days, the richest people in the world are no longer business people who process natural resources. Now, they are the ones who can utilize technology, such as Bill Gates with his vast company, Microsoft, Mark Zuckerberg with his masterpiece, Facebook, and Jack Ma with Alibaba.

The roles of FinTech in changing the economy world of Indonesia

As a country with the largest population in Southeast Asia and the fourth largest in the world, Indonesia is a big market for FinTech. According to Indonesia’s FinTech Association (AFTECH), the number of FinTech players in Indonesia grew by 78% between 2015 and 2016. Until November 2016, AFTECH recorded around 135 to 140 registered startup companies.

The presence of FinTech in Indonesia is strengthened by the momentum of the increasing number of middle-class and affluent consumers (MAC) who were predicted by Boston Consulting Group (BCG) to increase from 74 million people in 2013 to 141 million people in 2020. MAC is a group of people who will socio-economically start using their money a lot for households, vehicles, and financial services.

The Minister of National Development Planning, as well as Head of the National Development Planning Agency Bambang P.S. Brodjonegoro, explained three priorities of development that could be driven through the use of FinTech in Indonesia, i.e.:

First, capital mobilization to increase the economic activity of underserved community groups, such as Low-Income Communities (MBR) and Small and Medium Enterprises (SMEs).

Second, mobilizing funds in the community to finance basic infrastructures such as sanitation and electricity.

Third, fund mobilization to encourage sustainable infrastructure development, such as financing important innovations to increase agricultural and fisheries production.

From the regulator side, OJK views information technology as being used to develop the financial industry and can encourage the growth of alternative financing for the community. OJK also supports the growth of information technology-based financial services institutions so that they can contribute more to the national economy.

Therefore, OJK has issued its Regulation Number 77/POJK.01/Year 2016 concerning Information Technology-Based Money and Borrowing Services or Peer-to-Peer (P2P) Lending, which will be followed by other provisions related to FinTech in Indonesia, so that the regulation will become clearer and more complete.